Bloomberg has a very interesting article today comparing how different the bond market is today vs. 16 years ago when Bill Clinton was president:

The bond market is giving President Barack Obama the green light to spend more money to boost the faltering economy.

While the government has increased the amount of marketable Treasuries by 70 percent to $8.18 trillion the past two years, rising demand has driven yields so low that interest to service the debt has fallen 17 percent so far in fiscal 2010 ending Sept. 30 from all of 2008.

Instead of punishing the Obama administration for running up a budget deficit the Congressional Budget Office said will total $1.34 trillion this year, bond investors are pouring money into fixed-income assets as inflation slows and equity markets stumble. That's a turnaround from 16 years ago, when Bill Clinton was forced to abandon stimulus plans after his advisers said the bond market would punish him with higher borrowing costs if it sensed swelling deficits.

The most striking figures, though are these:

The yield on the two-year Treasury fell a record 0.4542 percent on Aug. 24, the day the U.S. sold $37 billion of the securities. In 1994, two-year yields exceeded 7 percent. Yields on 10-year notes dropped to an 18-month low of 2.4158 percent on Aug. 25, from more than 8 percent 16 years ago.

So, there you have it, in a nutshell: the difference between then and now is a mere 6.5% - two year interest rates were 7 percent in '94 and are less than 1% now.

WOW!

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Tags: bond market, bond vigilantes, interest rates, US Treasuries

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The debate rages on, even since this article was printed way back in February:

Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody's Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.

Yet I'm guessing you don’t think of the stimulus bill as a big success. You’ve read columns (by me, for example) complaining that it should have spent money more quickly. Or you’ve heard about the phantom ZIP code scandal: the fact that a government Web site mistakenly reported money being spent in nonexistent ZIP codes.

And many of the criticisms are valid. The program has had its flaws. But the attention they have received is wildly disproportionate to their importance. To hark back to another big government program, it’s almost as if the lasting image of the lunar space program was Apollo 6, an unmanned 1968 mission that had engine problems, and not Apollo 11, the moon landing.

Egg-zactly!

This precisely sums up the rhetoric:

The reasons for the stimulus’s middling popularity aren't a mystery. The unemployment rate remains near 10 percent, and many families are struggling. Saying that things could have been even worse doesn’t exactly inspire. Liberals don’t like the stimulus because they wish it were bigger. Republicans don’t like it because it’s a Democratic program. The Obama administration hurt the bill's popularity by making too rosy an economic forecast upon taking office.

But how does this compare to past financial crises?

Around the world over the last century, the typical financial crisis caused the jobless rate to rise for almost five years, according to work by the economists Carmen Reinhart and Kenneth Rogoff. On that timeline, our rate would still be rising in early 2012. Even that may be optimistic, given that the recent crisis was so bad. As Ben Bernanke, Henry Paulson (Republicans both) and many others warned in 2008, this recession had the potential to become a depression.

Yet the jobless rate is now expected to begin falling consistently by the end of this year.

For that, the stimulus package, flaws and all, deserves a big heaping of credit. "It prevented things from getting much worse than they otherwise would have been," Nariman Behravesh, Global Insight’s chief economist, says. "I think everyone would have to acknowledge that's a good thing."

The stimulus package HAS been a good - and essential - thing that has helped stanch the panic of late '08 early '09, and has hopefully bought us time to get back on our feet.

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Tags: CBO, employment, Moody's, stimulus package

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File this as another symptom of our capitalistic society pushing someone to the edge. This particular edge is quite awesome, though:

On Monday, on the tarmac at Kennedy International Airport, a JetBlue attendant named Steven Slater decided he had had enough, the authorities said.

After a dispute with a passenger who stood to fetch luggage too soon on a full flight just in from Pittsburgh, Mr. Slater, 38 and a career flight attendant, got on the public-address intercom and let loose a string of invective.

Then, the authorities said, he pulled the lever that activates the emergency-evacuation chute and slid down, making a dramatic exit not only from the plane but, one imagines, also from his airline career.

On his way out the door, he paused to grab a beer from the beverage cart. Then he ran to the employee parking lot and drove off, the authorities said.

Now THAT takes balls, eh?

It seems like the authorities weren't too happy, though:

He was arrested at his home in Belle Harbor, Queens, a few miles from the airport, and charged with felony counts of criminal mischief and reckless endangerment.

"When they hit that emergency chute, it drops down quickly within seconds," a law enforcement official said. "If someone was on the ground and it came down without warning, someone could be injured or killed."

True enough...and yet...and yet...don't you have a little soft spot in your heart for this guy?

A former roommate, John Rochelle, said Mr. Slater was seldom home and used his house primarily as a crash pad. When Mr. Slater was not working, Mr. Rochelle said, he was usually in Thousand Oaks, Calif., a Los Angeles suburb, caring for his sick mother.

A neighbor there, Ron Franz, said Mr. Slater also cared for his father as he was dying from Lou Gehrig's disease. Mr. Franz, 72, was hard-pressed to explain Mr. Slater's actions on Monday. "It could be the pressure of his mother's illness, because that's not the type of behavior or conduct that Steve exhibits," he said. "He's a very conscientious, responsible individual."

And finally, kudos to the two journalists on this story, Andy Newman and Ray Rivera, who dug this beauty of a quote up from a neighbor (sort of like a cherry on top!):

But a former flight attendant, Janet Bavasso, who lives next door to Mr. Slater in Queens, found nothing mysterious at all.

"Enough is enough -- good for him," Ms. Bavasso said. "If he would have called me, I would have picked him up."

Special!

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Tags: Andy Newman, flight attendant, Jet Blue, Ray Rivera, Steven Slater

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